Despite challenges such as the Ukraine/Russia conflict, energy shocks, and central banks raising rates, the real estate market in Portugal has been performing well. Commercial investment has surpassed the previous record, with 80% of the volume coming from international investors, while the residential market has reached another record high. The retail sector has also recovered, with sales volume at pre-COVID levels. Moreover, the market is facing a structural undersupply, leading to price surges and constraints on housing accessibility. Prospects for 2023 remain positive, with market fundamentals in Portugal remaining strong, and a considerable amount of liquidity available for deployment from investors.

The Portuguese economy experienced strong growth in 2022 and the first half of 2023, primarily due to a rebound in the tourism industry and an increase in exports of services. However, disruptions in global supply chains, particularly in energy and food markets due to the Ukraine/Russia conflict, led to a slowdown in GDP growth. Nevertheless, the forecast for the coming years is gradually improving. The unemployment rate remained stable but slightly above pre-pandemic levels, with employment growth slowing, and job vacancies reaching a historic high in Q2 2022.

The multifamily segment in Portugal has strong market fundamentals, including affordability in home acquisition and an increase in international demand from expats. With the growing attractiveness of Portugal and its universities to overseas students (+50% 2021 vs. 2016) and the rise of national students in mobility (+10% 2021 vs. 2016), the student accommodation sector is also performing well, with high levels of occupancy rates.

Despite facing a challenging pandemic period, the hotel sector has shown clear signs of recovery in 2022, with an overall positive performance continuing in 2023. Even though Covid-19 restrictions in the first quarter of 2022 affected the sector, hotels managed to show high dynamism. The asset quality improved, with 5-star hotels representing more than 23% of the total openings in 2022. There was significant recovery in international demand, which returned to 2019 figures, representing around 40% of the total number of guests. Continuous interest from both international and national institutional investors was registered, with yields remaining resilient due to the scarcity of existing supply, unable to respond to the increasing demand. Finally, good prospects are estimated for the sector, with Portugal continuing to be seen as a reference tourist destination.

The residential market in Portugal had a strong performance in 2022, with high demand and low supply driving up prices, continuing into 2023. JLL estimates that it will be the best year ever in terms of sales transactions, with an expected 168,000 units sold and a sales volume of €30-31 billion. The market is driven by both domestic and international demand, with foreign purchasers responsible for 6% of the market share but 11% of the sales volume. US investment in Portugal showed tremendous growth, with the US now the leading country investing in Portugal when looking at the Golden Visa applications. Compared with the same period of 2021, US investment more than tripled.


The market for home acquisition in Portugal has become more balanced, with housing loans representing 50% of the housing volume. Despite stricter mortgage conditions, the market has seen an increase in mortgage stock. However, the lack of supply and stricter mortgage accessibility have resulted in affordability constraints for the middle class, creating an opportunity for the development of the lease market. Prices are expected to remain high as no stock increase is expected in the medium term. JLL expects that more new home projects will be launched in the vicinity of Lisbon and Porto, representing a good investment opportunity due to competitive pricing.

In conclusion, the Portuguese real estate market has shown strong and stable growth in recent years, with demand for properties in popular areas such as Lisbon, Porto, and the Algarve region remaining high. Additionally, Portugal offers a favorable tax regime for foreign investors, including the Non-Habitual Residency program, which provides tax exemptions for foreign residents for a period of 10 years. The JLL report shows how Portugal has become a popular tourist destination in recent years, with millions of visitors flocking to the country annually. Despite the recent growth in the Portuguese real estate market, prices remain competitive compared to other European countries, making it an attractive option for investors looking for affordable properties with strong growth potential.